Been pretty quiet at KME so far this year. I notice the buyback appears to have stopped at the turn of the calendar year, not sure why.

Anyway, I'm hoping the silence is golden and they are just deciding, responsibly, what next to do with the cash (eg. special dividend)!

As you say @Dangles they only recently confirmed their expectation for profit growth. For me, its mostly driven by this reduction in investment and therefore reduction in D&A (they've said this will contribute 0.5M to profit growth - 20-25%!) - this is a tailwind I think will be in place for a few years and the market might not appreciate.

To spell that out - and please call me out if this is wrong - for this year FY26 they've forecast $0.5M reduction in D&A, which would put D&A at about $4.0M for the year. Alongside this they've forecast new investment into franchises and tech of $1.7M. So there is still $2.3M gap of improved cash profitability (ie. ~100% of their profit) being masked in the statutory accounts due to the previous over-investment. Say this unwinds at 0.5M per year for the next 4 years, it will add another 2M to NPAT (I'm rounding down slightly from 2.3), pushing NPAT up to something like $4.5M (all else being equal - no growth/slowdown in general business). This would allow for about 50% price appreciation vs today if we assume a multiple of about 10x (to a market cap of $45M). And based on today's price they'd be able to pump out a nice fat dividend too.

I'm overweight this stock in real life, but assuming the tutoring market doesn't fall in a heap (noted AI threat) and that there is steady competent management, I feel that in the base case there's a steady re-rate ahead without any heroic assumptions on growth. It's a value play, so the trick will be not to sell when value is reflected in the price and not to fall for another growth story (assuming one arises in a few years once hopefully price has appreciated and management feel inclined to pump it!).

If it does somehow capture the market's imagination - through an increased dividend or anything - and the multiple expands to 15 or 20x then happy days (and probably time to sell).

Planning to buy a few more IRL.